Stock option

Glossaries

Stock options are often issued by start-ups in the early (seed) stage of their development or by companies later in their lifecycle in order to form ties with individuals with certain skills, allowing them to share in a potential value increase without having to burn seed capital by paying (substantial) cash compensation.A stock option allows its holder to purchase a number of (existing) shares at a fixed price within a certain period of time (i.e. until or on the expiration date). A stock option may be granted free of charge or for a fee.